Red letter days

Labour & European Law ReviewWeekly Issue 27819 July 2012

Anyone wanting to lodge a claim for unfair dismissal has to do so within three months of the effective date of termination (EDT) of their employment contract. In Hawes & Curtis Ltd v Arfan and Mirza, the Employment Appeal Tribunal (EAT) said that the EDT does not always crystallise on the date of summary dismissal.

Basic facts

Mr Arfan and Mr Mirza were the manager and assistant manager respectively at the firm’s store in LIverpool Street station. They were suspended in September 2010, following an audit that identified substantial stock losses valued at just over £144,000.

Following an investigation and disciplinary hearing, the company wrote to the two men on 5 October, telling them they had been dismissed “as of the date of this letter”. They appealed and were told by letter on 4 November 2010 that their appeals had been unsuccessful but that their effective date of termination had been changed to 4 November. Both men were paid up to that date.

They lodged claims for unfair dismissal on 27 January 2011 and gave 4 November as the effective date of termination. When the company lodged its response, it did not challenge the EDT.

The case was listed for hearing on 29 February 2012 but on 13 January, the company’s solicitors wrote to the Tribunal to say that they wanted to amend the EDT on their response form to 5 October 2010.

Tribunal decision

A majority of the Tribunal panel decided that 4 November 2010 was the EDT because the employer had clearly intended to change it to that date. Both employees continued to be paid until then and neither party thought it was notice pay or an ex gratia payment. The application and response forms were consistent with the EDT being 4 November 2010 and the employer did not dispute it until a year later.

However, the employment judge disagreed, saying that the letter dated 5 October 2010 “contained clear words of dismissal terminating the contract of employment”, whereas the letter of 4 November 2010 did not. The contract would somehow have to be reinstated before there could be a fresh EDT and he could not read the letter dated 4 November in that way.

EAT decision

The EAT upheld the view of the majority, saying that the EDT does not always crystallise on the date of summary dismissal.

The Tribunal had found, as a matter of fact, that the company decided to change the EDT and to retain the two men in employment until the later date. It has also paid them under the PAYE system until 4 November. The Tribunal had been entitled to take into account what happened on appeal as the provision of an internal appeal was integral to protecting the rights of employees.

It made clear that the EDT depended on what happened between the parties. That included the decision at an internal appeal and in the (no doubt rare) case where it resulted in a change of the date on which the employment was terminated, that decision had to be taken into account in determining the EDT. This was one of those rare cases.

It concluded that “just as the contract of employment revives indefinitely if an appeal reinstates the employee, so it revives for a limited period if an appeal varies a summary dismissal to a dismissal on notice or a dismissal on some other date”.

Comment

Whilst the claimants can consider themselves vindicated it is important to remember that they have had a rocky and expensive journey to reach this conclusion. Interesting though this is, the sensible practice remains to use the earliest date possible and lodge your claim in plenty of time.